PNS133 BEYOND INTERNATIONAL PRICING INDEX MODEL IN THE UNITED STATES - IMPACT TO GLOBAL PRICING STRATEGIES & ACCESS TO INNOVATIVE MEDICINES

Abstract

International Pricing Index (IPI) model has been proposed in the United States (US) with the aim to reduce Medicare Part B drug expenditures. IPI may introduce the external reference pricing (ERP) mechanism to the US market during 2020. The primary objective was to analyze how interconnected European ERP landscape could indirectly affect US prices as a result of price drops in non-IPI reference basket countries (RB). A sample of 25 Medicare Plan B drugs with the highest sales in 2018 was analyzed using Cogvio's medicine price database.Average selling price (ASP) in the US was compared to ex-factory prices of comparable packages in the proposed RB. Total spending on medicines was used as a proxy for sales and consecutively for IPI weighted average price calculation. An algorithm considering ERP regulation in each European country from the IPI RB (“baskets of the IPI basket”) has been created and hypothetical US prices were set. Stress tests were performed by dropping the price by 10% in a non-IPI RB to examine the indirect effect on US prices. US prices are on average 193 % higher compared to IPI RB price. Non-IPI RB countries were ranked based on the ability to indirectly impact US prices during the price drop stress test. Spain is being referenced by 10 out of 14 IPI RB and is the only EU5 country not listed in the IPI RB. As a result, Spain is an example of a highly-ranked country influencing US prices significantly together with several other countries in the CEE region. The simulation proved the possible impact of medicine prices outside of the proposed IPI RB to the US market. International pharmaceutical companies may adjust global pricing strategies to maximize revenues. As a consequence, low priority market may experience delayed access to innovative medicines.